to do with goods, such as anti-dumping, agriculture, tariffs, and technical barriers. The most important thing that I have learned from this website was what the WTO is and what it does. DEFINE absolute and comparative advantage. Absolute advantage- In economics, the principle of absolute advantage is the ability of a party (an individual, or firm, or country) to produce more of a
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International Trade Simulation Student January 22, 20xx XECO/212 This is a report for the President of Rodamia to discuss the advantages and the disadvantages of international trade between Rodamia and the surrounding countries around Rodamia. This report is also going to discuss the absolute and comparative advantage. Based on the information from this report, there is going to be a possible recommendation to the President of Rodamia whether or not to trade internationally
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person has an absolute advantage in which activities? Someone can produce more per unit of time will always be given absolute advantage in that given activity. Michelle’s has the absolute advantage in both potatoes and chickens simply because her opportunity cost of raising chickens is four lbs. of potatoes per chicken. James’ O.C. of chickens is two pounds of potatoes per chicken. * Which person has comparative advantage in potatoes? Michelle has the comparative advantage in potatoes since
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Unit 1 Assignment 1: Concepts of Microeconomics Microeconomics: ECON220-1104B-29 AIU-Online Suequeena Diane Williams November 8, 2011 One of the most basic economic principles is that of opportunity cost. Simply stated, an opportunity cost can be defined as what is required for an individual to give up in attempts to gain something else desired (Moffatt, 2009). Because most choices are individual based in nature, we are often faced with these either-or tradeoff analysis. For purposes of
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Concepts Principles of Macro-Economics Shacara Wyatt South University Online Absolute and Comparative Advantage An absolute advantage is the ability to produce a good or service while using minimum resources than any other producers (Hall & Liberman, 2014). The benefits of the international trade from absolute advantage is the fact that each country has an advantage in various goods and services. This advantage also has benefits for international trade, individuals have the opportunity to
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Ricardo: The Intellectual Contributor The aim of this paper is to point out how the great thinker David Ricardo continued or answered some of the unresolved questions in Adam Smith’s theories. David Ricardo started off as a stockbroker then turned to an economist. He was a man who contributed to numerous areas of economic theory, including methodology, diminishing returns, rent, theories of value, and international trade. Ricardo began studying economics around 1799 at age 28, and published his
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grain | 4/5 cars | d) Which country has an absolute advantage in producing cars? In producing grain? In producing cars both countries have absolute advantage because each worker in these countries produces 4 cars/year. But in producing grain USA has an absolute advantage because in 1 year a worker produces 10 tons of grain instead of the JAPAN worker who produces 5 tons of grain. e) Which country has a comparative advantage in producing cars? In producing grain? USA has a lower
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Comparative & Absolute Advantage There are many different advantages that can be gained when working in the different economic markets. There are two advantages known as a comparative advantage and an absolute advantage. Absolute advantage is known for the capability of a individual or country to produce a good or service with less assets than another country or individual. Comparative advantage is the capacity of an individual or country to manufacture a particular product for a lower opportunity
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argue on the evolvement of business since the 16th century. The theories are classical theories that derived from an economic perspective. There are 4 theories involved in country-based theories. They are Mercantilism Theory, Absolute Advantage Theory, Comparative Advantage Theory and Heckscher-Ohlin Theory. Firm-based theories attempt to explain business phenomena related to international trade. Mercantilism theory was the first theory of international business that emerged in England in the
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TUTORIAL WEEK 1 ANSWERS Comparative Advantage and the Basis for Trade Question 1 a) What is the production possibility curve and what does it reflect? b) With this in mind, construct a PPC for two products and label two points, one attainable and one unattainable. Next consider what it means to be on the PPC. c) Consider two points on the PPC. Now consider a movement along the PPC from one of these points to the next. Look at the initial situation and the final one. What does this movement
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